A Federal Tax Lien just makes sure the IRS eventually gets paid. A levy means now the IRS gets paid.

A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a claim used as security for the tax debt, while a levy actually takes the property to satisfy the tax debt.

If you do not pay your taxes (or make arrangements to settle your debt), the IRS may seize and sell any type of real or personal property that you own or have an interest in.

For instance,

• The IRS could seize and sell property that you hold (such as your car, boat, or house), or

• The IRS could levy property that is yours but is held by someone else (such as your wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions).

What due process must IRS follow before they can levy?

The IRS will levy only after these three requirements are met:

• The IRS assessed the tax and sent you a Notice and Demand for Payment;

• You neglected or refused to pay the tax; and

• The IRS sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy. The IRS will give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested.

The Final Notice of Intent to Levy and Notice of Your Right to A Hearing is your last warning before the IRS starts levy action. You do not want to ignore this notice.

Difference between a bank levy and a wage levy.

If the IRS levies your bank account, your bank must hold funds you have on deposit, up to the amount you owe, for 21 days. This holding period allows time to resolve any issues about account ownership. After 21 days, the bank must send the money plus interest, if it applies, to the IRS.

If the IRS levies your wages, salary, federal payments or state refunds, the levy will end when:

• The levy is released,

• You pay your tax debt, or

• The time expires for legally collecting the tax.

Don’t Take The Chance And Lose Everything You Have Worked For.

Protect yourself. If you are in danger of wage garnishments or bank levies or having a tax lien placed against your property, stand up to the IRS by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation.

Original Post By:  Jeffrey Kahn